Vehicle sales figures for July suggest luxury car buyers have forgotten about the recession. By RICHARD BLACKBURN.

Luxury cars avoid the economic gloom

Middle Australia may be feeling the effects of the global financial crisis, but the top end of town still appears to have enough money to splash on new cars.

Figures released by the Federal Chamber of Automotive Industries today show that while the overall car market was down 10 per cent in July, sales of luxury cars bucked the trend.

Audi, Lexus, BMW, Porsche, Volvo and Ferrari all recorded better sales than they did last July, when the downturn was first beginning to bite.

BMW doubled sales of its top-of-the-range 7-Series sedan, which costs between $200,000 and $300,000, while Porsche sold twice as many 911 supercars, which range between $200,000 and $450,000.

Sales of sports cars over $80,000 grew by close to 15 per cent, while sales of sports cars over $200,000 grew by more than 5 per cent.

Luxury four-wheel-drive sales also increased over the same month last year, suggesting concerns about fuel prices and global warming may also have taken a back seat.

Most of the increases were driven by newly-launched models, although uncharacteristic fierce discounting by some luxury brands has also had an impact.

Mainstream brands didn’t fare as well in July, with market leader Toyota recording a 19 per cent drop in sales, Holden down 8 per cent and Ford down 18 per cent.

But budget Korean brand Hyundai continues to make hay while the economic sun doesn’t shine, with sales up a staggering 65 per cent.

Sales of the brand’s cheapest car, the Hyundai Getz, were up by a third, while its small car, the i30, doubled its sales.

Holden’s new Korean-built Cruze small car, which will be built in Australia from next year, also sold well in its first full month on the market.

But locally-built vehicles recorded a drop of almost 20 per cent on last July.

The country’s top-selling car for the past 13 years, the Holden Commodore, was outsold by Toyota’s Corolla small car, while Ford’s Territory off-roader was also shaded by imported competitors.

The chief executive of the FCAI, Andrew McKellar, said conditions remained “intensely challenging” for the local industry, which also had to contend with dwindling export revenue.

But he said recent moves to increase the fuel efficiency of locally-built cars were a step in the right direction.

Holden this week announced it would fit a new smaller V6 engine to its Commodore range, while Ford recently revealed plans to build a four-cylinder version of the Falcon and a more frugal, diesel version of the Territory.

“That is a sign that the local manufacturers are responding to what the market is looking for and I think it will give them some added strength as we go forward,” he said.

McKellar said the overall market was continuing to benefit from the Federal Government’s economic stimulus measures, including tax breaks for business vehicles.

“I think the impact of the business tax break has spilled over into the July figures, which is further confirmation that it has been a successful policy measure,” he said.

He expects the breaks to continue stimulating demand in the business market for the rest of the year.

“We have weathered the worst of the downturn but I think it’s going to be very important that we continue to see emerging signs of health in the broader economy,” he said.

“At the start of the year, we predicted sales of 880,000 units and we are on track to achieve that.”